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Uber announces 3,300 layoffs in major restructuring; stock rises 2.4%
Uber shares rise after the company announces 3,300 job cuts. The restructuring will reduce management layers, cut costs and boost investments.
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Uber shares rose after the company announced major job cuts. Uber Technologies shares rose about 2.4% in Wednesday morning trading after reports that the company plans to cut around 3,300 jobs, or roughly 10% of its global workforce. The layoffs are part of a restructuring aimed at reducing management layers, cutting costs and making the company’s structure simpler.
The layoffs will mainly target management roles. Uber said the restructuring will reduce the number of managers at the company by about 20%. Some managers will be moved into individual contributor roles instead of being removed from the company, according to a company spokesperson cited by Bloomberg News.
Uber plans 3,300 job cuts
Uber wants to remove layers that have built up as the company grew. CEO Dara Khosrowshahi said Uber’s growth has created more management layers, more coordination and less clear ownership of work. He said some company structures that worked when Uber was smaller no longer make sense at its current size, according to an email obtained by Bloomberg News.
The company is also cutting down on small teams. Uber plans to reduce by nearly half the number of “micro-teams” with only one or two direct reports. The company will also reduce the number of employees who are seven or more reporting layers below the CEO, Reuters reported.
Uber cuts management layers
Uber is combining several teams to make decisions faster. The company plans to streamline its core engineering, science and delivery groups. Uber will also combine its three operations teams focused on restaurants, retail and its white-label delivery service.
Uber layoffs are biggest since 2020
These will be Uber’s biggest job cuts since the pandemic. Uber had about 34,000 employees worldwide at the end of last year, according to its annual report. The company last made bigger cuts in May 2020, when it laid off about 6,700 workers, or nearly one-fourth of its workforce.
Uber is not blaming AI for the job cuts. Some other tech companies have linked layoffs to artificial intelligence. However, Uber CEO Dara Khosrowshahi said the restructuring is mainly about simplifying the company, reducing extra layers of management and cutting jobs focused mostly on coordination.
Uber plans to reinvest savings
Uber expects the restructuring to save money. Khosrowshahi said the changes will generate savings for the company. Uber plans to use those savings to invest in areas that it believes will support future growth and innovation, according to Bloomberg News.
Drivers, couriers and merchants are among the areas set to receive more investment. Uber plans to put additional money into its network of drivers, couriers and merchants, along with improvements to its main ride-sharing and delivery businesses.
Investors reacted positively to the job cuts. Uber shares rose about 2% in premarket trading after the news, which was first reported by Bloomberg News, Reuters reported. The rise shows that investors may see the job cuts and simpler company structure as a good move to lower costs and improve efficiency.
